Tesla Inc (NASDAQ:TSLA) is offering substantial discounts of up to 40% to car leasing companies in the United Kingdom in an effort to boost declining sales, according to The Times on Monday. The electric vehicle maker, led by Elon Musk, has been facing a significant contraction in its global market share.
Industry sources told The Times that the discounts—reflected in lower monthly payments for customers—are partly driven by limited storage capacity for Tesla vehicles.
Under the new arrangements, a Tesla Model 3, the company’s best-selling model, can be leased for as little as £252 per month plus VAT for a 36-month contract. This marks a sharp decline from last year, when monthly payments ranged between £600 and £700.
While Tesla has yet to reduce the sticker price of its vehicles, the company is offering zero-interest financing deals. In the UK, these offers could cost Tesla around £6,000 over three years for a £40,000 car.
The aggressive pricing strategy comes as Tesla continues to navigate a prolonged global sales slowdown. Much of the drop has been concentrated in the UK and Europe, where the company faces rising competition from Chinese EV manufacturers.
Tesla’s European performance has also been affected by public backlash over Musk’s political affiliations, particularly his links to the alt-right. Throughout 2025, some Tesla facilities were targeted and sales boycotts were reported across Europe.
In July, Tesla’s UK sales fell by 60%, while China’s BYD Co (USOTC:BYDDY) overtook the company in market share.
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